Tag Archives: Department of Labor

Each year, LP’s Labor & Employment Practice Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope that you find our 2018 Labor and Employment Law Checklist to be a helpful guide to best practices for the year ahead.

Download the checkable PDF here. Print it out for yearlong reference, or get started right away and enjoy the satisfaction of checking some very important items off your list.

Deal with the Elephant in the Room and Conduct Harassment Training for Your Workforce. With the headlines around harassment and abuse allegations and the #MeToo and #TIMESUP movements, there is no hotter topic in employment law right now than workplace harassment. Appropriate training ensures both that your employees know how to stop harassment when they experience it and that your company can take advantage of certain defenses to claims that may come up in the future. If your company has not conducted training in the last two years, put it on the agenda for 2018.

Decide on Your Investigation Procedures Now. When serious allegations of harassment and discrimination arise, they need to be investigated by experienced legal and HR professionals in order to get to the bottom of what really happened. Well run investigations also form another foundation in a company’s legal defense. Because speed counts when employees raise issues, determine now which outside investigators are on your short list and how you will approach such investigations.

Determine Whether to Ask About Applicant Pay History. In an effort to eliminate gender discrimination in compensation, many state and local governments have taken steps to ban employers from asking applicants about their pay in prior jobs. For example, California’s law took effect January 1, 2018 and Massachusetts’ law takes effect on July 1, 2018. Making things more complicated it that it’s not entirely clear which state’s law applies when the recruiting process crosses state lines. Employers need to determine if the jurisdictions where they operate have laws of this kind and immediately take steps to change hiring procedures to account for them.

Monitor the Changes at the NLRB. The National Labor Relations Board is now fully controlled by its Republican members, and rulings are already starting to change the landscape for employers. For instance, recent decisions by the NLRB have relaxed the standard applicable to policies in employee handbooks. Consider re-reviewing employee handbooks to take advantage of this change and be aware of how other changes at the NLRB impact your business.

Review Changing Leave Laws. One area where employee rights have continued to expand is in the area of leave laws. For instance, New York has a new law on paid family leave that took effect on January 1, 2018, and California has a law that took effect on that date expanding parental leave rights. Many states and municipalities also have passed new paid sick leave laws. It is important for employers to ensure that their HR teams understand these new laws and that their leave policies encompass the broader rights being given to employees.

Don’t Let Employees Engage in Distracted Driving. When employees drive as part of their job, employers can be held liable for accidents that result from distracted driving. Laws around distracted driving are getting tougher. For instance, Rhode Island recently passed a law banning all mobile phone use by drivers, with limited exceptions for hands-free devices. In Washington, a new law went into effect on January 23rd that prohibits drivers from even holding gadgets at a stop sign or red light. Be sure your policies make clear that safety comes first, appropriately address employee responsibilities while driving and give employees the right to defer calls until they are off the road.

Is It Time to Reconsider Using Arbitration Agreements? Some employers have been reluctant to use arbitration agreements with their employees because of uncertainty about the enforceability of these agreements, particularly in situations involving class actions. Last fall, the Supreme Court head oral argument in a case that is expected to clarify the law in this area. If this ruling ends up being favorable for employers, it may be time to reconsider whether arbitration is a better forum for resolving employee disputes.

Be Careful Gathering Genetic Information. Employers must be careful in how they gather and use genetic information concerning employees and applicants. Congress passed the Genetic Information Nondiscrimination Act in 2008 and approximately 37 states have laws on this topic. As of January 1, 2018, changes to the Illinois Genetic Information Privacy Act prohibit employers from penalizing employees who refuse to provide genetic information. This law was intended to head off efforts to require employees to provide genetic information in wellness programs.

If Using Biometric Data, Make Sure You Know Legal Requirements. In 2017 we saw a large number of class actions filed under the Illinois Biometric Information Privacy Act (IBIPA) against employers whose employees clock in and out using their fingerprint or a hand scan. These cases, which allege that the employers failed to meet the very specific requirements set out in IBIPA, are still in their early stages, but employers who use fingerprints or other biometric information for time tracking, security access, or other purposes should make sure that they understand and are complying with IBIPA’s requirements.

Review how Marijuana is Treated Under Drug Policies. Recreational marijuana is now legal in seven states, including California, and nineteen states have laws permitting the use of marijuana for medical purposes. In view of the spread of laws permitting marijuana use, many employers have re-examined their drug policies and decided to treat marijuana differently from other illegal drugs. There are pros and cons to these changes and the right move depends to some extent on where an employer has operations, but 2018 may be the time to assess whether you are taking the right approach.

Are You Ready for a Data Breach? In 2017, nine states enacted new or amended security breach laws. Last year, updates to Illinois’ Personal Information Protection Act went into effect expanding the definition of protected information and increasing the notice obligations for breaches. All employers should review the security safeguards being used to protect such information and also plan now for the steps that need to be taken in the event of a data breach.

Understand Pregnancy Accommodation Obligations. Under the Americans with Disabilities Act, employers have an obligation to accommodate pregnancy-related conditions. Now, however, many states are also passing specific laws requiring employers to accommodate employees who are pregnant or breastfeeding. Illinois amended its own Human Rights Act in 2015 to protect pregnant employees, and other states have been catching up. For instance, Vermont and Massachusetts have new laws going into effect in 2018. Employers should be sure that as issues arise, they understand and comply with both their federal and state pregnancy accommodation obligations.

It seems like we spent the better part of 2016 getting ready to comply with the new overtime regulations that had been set to go into effect December 1, 2016 — until a federal judge in Texas issued a last-minute injunction. The Texas court’s injunction meant that the new overtime standards — including a much higher minimum salary requirement — did not go into effect as planned, even though many employers had already made changes to comply with them. That injunction is currently being appealed before the 5th Circuit, but the new Department of Labor’s positioning in that appeal is raising the potential that the 2016 rules could come back to life — at least until a new, replacement rule can get through the rule making process.

The issue here is that while the new Secretary of Labor has taken steps toward revising the overtime regulations (with an eye toward making them more employer-friendly), the DOL has not asked the appellate court to uphold the injunction that was issued late last November. This sets up a situation where the 5th Circuit could rule to dissolve the injunction — allowing the Obama administration’s rule to go into effect — before the agency has a replacement rule ready via the regulatory process.

Were this to occur, it would create a very difficult situation for the DOL and employers alike. The current DOL would be charged with implementing a rule that it plans to do away with, and employers would have to figure out how to comply with a rule that will likely change in the near future.

We suggest that employers hold tight until more information is known. Given the last-minute nature of the injunction, many employers had already taken steps to comply with the new overtime rules before they were stayed, so if the injunction is dissolved, those employers should be able to pick the process back up where they left off.

It is not clear when the 5th Circuit will issue its decision on the fate of the regulations and injunction, but we will alert you when it does.

Earlier today, U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s informal guidance on joint employment and independent contractors issued during the Obama administration. The announcement states that the withdrawal does not “change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act” and that the DOL “will continue to fully and fairly enforce all laws within its jurisdiction.” We will keep you updated on any additional word from the DOL on these issues, but it appears that by withdrawing these guidelines, the new administration is taking a first step away from attempts of the Obama administration and the NLRB to expand concepts of joint employment.

Two recent developments are a good reminder that companies who have independent contractors are under increased scrutiny and face a high bar in establishing that independent contractors are properly classified as such — and not employees.

On July 15th, the Department of Labor issued a guidance saying that most workers qualify as employees under the Fair Labor Standards Act (FLSA) regardless of what the worker and the company may have agreed to. The guidance doesn’t announce a new test for independent contractor status. Instead, it starts with the “economic realities” test for independent contrator status that courts regularly use and a reads it together with a broad view of the FLSA’s definition of employ to reach a conclusion that most independent contractors are misclassified and should, instead, be treated as employees.

The DOL’s guidance was close on the heels of a decision by the Seventh Circuit Court of Appeals, which reversed the lower court and ruled that FedEx delivery drivers are employees under Kansas state law, not independent contractors. In making its decision, the 7th Circuit certified the question of whether the drivers were employees under the Kansas Wage Payment Act to the Kansas Supreme Court. The Kansas Supreme Court, applying a 20-factor test, found that the drivers were employees because FedEx, among other things, assigns drivers their routes; requires them to check in with FedEx managers at the start of their day; regulates their appearance; and decides whether to hire a driver after the driver submits resumes and references like any other employee.

So what are the consequences of misclassification? Companies that misclassify employees as independent contractors face penalties for failing to pay employment taxes, for failing to withhold taxes from pay, for failing to comply with wage and hour requirements (such as overtime), for failing to contribute to unemployment compensation, and for failing to comply with other employment-related laws. In addition, the Affordable Care Act opens companies that misclassify workers to significant penalties — both based on failure to offer coverage to the required portion of the workforce and where a misclassified worker obtains coverage on an exchange.

In light of these developments, we strongly recommend that any company that has independent contractors work with counsel to determine if these workers are properly classified. A thorough review now could save you lots of money, time, and aggravation later.

This morning the Department of Labor announced that it is seeking to increase the number of employees eligible for overtime pay by increasing the minimum salary required if an employee is to be considered exempt under the administrative, executive and professional exemptions. The proposed increase would take the minimum annualized salary from $23,660 to $50,440. In addition, under the proposed rule the threshold for the FLSA’s Highly Compensated Employee exemption would rise from $100,000 to $122,148. Both the minimum salary and the Highly Compensated Employee threshold would be indexed for inflation. The DOL also suggested that it may seek other changes to limit the available overtime exemptions. If this change becomes a final rule, we would expect it to become effective in 2016.

Note that even if employees meet the higher minimum salary requirement, they still must meet the other requirements for exempt status — being paid on a salary basis and satisfying one of the duties tests — to qualify as exempt from overtime requirements.

No action is necessary at the moment as the proposed rule is not final. We will keep you updated on future developments.

The U.S. Department of Labor (DOL) has released its spring 2015 regulatory agenda, which provides a window into what we can expect from the agency over the coming months. The agenda provides updates on 70 rulemaking measures and suggests that — with President Obama’s term approaching its end — the DOL is putting its rule-making into high gear.

Here are some highlights from the agenda:

Overtime Pay

The DOL indicates that we should see the proposed rule redefining the white-collar exemption under the Fair Labor Standards Act (FLSA) in June. As we reported last year, President Obama has directed Labor Secretary Thomas Perez to “modernize and streamline” the regulations defining this exemption for executive, administrative, professional, outside sales, and computer employees. We expect that the proposed rule will narrow the white-collar exemptions, resulting in fewer employees qualifying as exempt from overtime requirements.

Use of Technology during Non-Working Hours

Also on the agenda is information seeking – in the pre-rule stage – on “the use of technology, including portable electronic devices, by employees away from the workplace and outside of scheduled work hours.” It appears that the DOL is seeking this information with an eye toward proposing a rule clarifying how this type of 21st Century off-the-clock work is compensated (likely to the benefit of employees). The request for information is expected in August.

Reporting under the Labor-Management Reporting and Disclosure Act

Lastly, the DOL agenda also indicates that we should expect a controversial final rule on the narrowing of the “advice” exception under the Labor-Management Reporting and Disclosure Act (LMRDA) in December. The LMRDA requires employers and labor relations consultants (or other similar individuals) to report any agreement or arrangement they have to engage in activities to persuade employees concerning the right to organize or bargain collectively. The LMRDA contains an exception for “advice,” stating that no employer or consultant has to file a report concerning services of a consultant if that consultant just gives “advice” to the employer. The proposed rule would limit the definition of “advice” to “oral or written recommendations,” so that any other activity would need to be reported. This proposed rule has been on the books for a number of years and continues to face serious opposition from many groups — including the American Bar Association — because it raises critical concerns about attorney-client privilege. We expect lengthy legal challenges to this rule.

It should be a busy second-half of the year for the DOL. We will keep you updated on any new developments.

Statistics released earlier this month by the Administrative Office of the U.S. Courts show an 8.8% increase in the number of Fair Labor Standards Act (“FLSA”) cases in the year ending in September 2014 as compared to the prior year.

This dramatic increase is the result of a variety of factors. First, the law itself has many ambiguities in its terms and definitions. Although the Department of Labor has attempted to reduce ambiguity in its guidance and regulations, many terms and issues are still unresolved and leave open the potential for legal claims. Also, the law is old. Applying a law passed in 1938 to the modern workplace, with drastic advances in technology, can be very difficult and often times leads to confusion. Finally, both employees and the attorneys to whom they may go to challenge a termination are becoming more savvy regarding wage and hour issues. As a result, we are seeing many cases where a terminated employee who comes into an attorney’s office looking to sue for “wrongful termination” walks out with a wage and hour claim – potentially even a class claim.

Employers should continue to review wage and hour practices to make sure that employees are properly classified as exempt or non-exempt and are being paid in accordance with local requirements. In addition, employers with specific concerns about class or collective actions should consider an arbitration program, which would require all claims to be dealt with in arbitration on an individual – not class or collective – basis.